Key points:
The stock has broken out of a 24-week cup-with-handle base.
The stock has a high EPS Rank of 91, aided by FY 2015–2018 EPS CAGR of 17%. Earnings stability factor is the best, at 1, indicating the Company’s consistent performance.
During this period, pretax margin improved from 12% to 14%.
RS Rating of 84, A/D Rating of C+.
Key points:
The stock is constructively building the right side of a 10-week flat base. We recommend buying shares here in anticipation of the stock clearing above resistance at ~INR 760.
Technical ratings: RS line is at a new high, RS Rating 90, and A/D Rating A-.
Fundamental ratings: EPS Rank 63, SMR Rating C, and Composite Rating 90.
Market Overview :
The U.S. market is in a Confirmed Uptrend. The S&P 500 is now trading just 2% off highs, while the Nasdaq
made a new all-time high after finding strong support at the 50-DMA last week. Distribution stands at five days
on the S&P 500 and four on the Nasdaq, with one day expiring on the S&P 500 at the close next Wednesday.
Leading ideas showed very strong price action this week, with more than 25% of the U.S. Focus List hitting a new
all-time high. We recommend buying high relative strength ideas across leading and/or improving industry
groups at risk-optimal entry points.
Stocks on our U.S. Focus List: Current Sentiment
Our USFL of 68 ideas gained 1.5% on average this week, in line with the S&P 500 (+1.5%) and underperform-
ing the Nasdaq (+1.8%).
Actionable Focus List ideas: Activision Blizzard ( ATVI ), Alphabet ( GOOGL ), Arista Networks ( ANET ), Calavo
Growers ( CVGW ), Diamondback Energy ( FANG ), Edwards Lifesciences ( EW ), Fleetcor Technologies ( FLT ), Global
Payments ( GPN ), Home Depot ( HD ), Nextera Energy ( NEP ), Paypal ( PYPL ), PRA Health Sciences ( PRAH ),
RingCentral ( RNG ), SS&C Technologies ( SSNC ), Vertex Pharmaceuticals ( VRTX ), Worldpay ( WP )
USFL ideas weekly earnings line-up:
Monday: Close: NFLX
Tuesday: Open: SCHW, UNH
Wednesday: Close: TCBI
Thursday: Close: WAL
By Sector
Technology and Health Care ideas on the U.S. Focus List led this week. Within Technology, software led with
NOW, ATVI, CRM, TEAM, and ADBE all moving back into new highs. PAYC, RNG, TYL, VEEV, and ADSK all re-
gained their respective 50-DMA. Outside of software, GOOGL is actionable after breaking out of consolidation
and back into all-time highs. Within Health Care, five of our nine ideas made new all-time highs. ILMN, IDXX,
and PRAH continue to trend into higher highs, while VRTX just broke out on Friday from a 17-week cup. Payment
Processors also continue to act well, with PYPL, WP, GPN, MA, V, and FLT all trading at or near new highs. Con-
versely, Banks remain weak. WAL, ZION, and TCBI are all testing the low end of near-term support ahead of
their respective earnings announcements in the coming days. SIVB remains the leader, despite trading below its
50-DMA and ~10% off highs.
Key points:
The stock broke out of a 12-week consolidation into all-time highs on 1.4x average daily volume. We recommend adding to positions here. Support is at the rising 50-DMA. We would note that Q2 earnings results are scheduled forJuly 26.
Technical ratings: RS line is at a new high, RS Rating 92, and A/D Rating B+.
Fundamental ratings: EPS Rank 95, SMR Rating A, and Composite Rating 99.
Some highlights from the report:
Market Overview :
The U.S. market is in an Uptrend Under Pressure. We are encouraged by strong price action and the decline in
distribution this week, but would like to see confirmation next week with bigger volume before we move the mar-
ket back into a Confirmed Uptrend. Distribution now stands at four days on the S&P 500 and five on the
Nasdaq, with one day set to expire on the Nasdaq next Thursday. We are also encouraged by the action of
leading ideas over the last few sessions. Though the majority of leadership continues to consolidate, multiple
ideas have been able to hold and move higher off short-term levels of support over the past week. Our recom-
mendation will be to buy high relative strength ideas at ideal pivot points should we see the major averages hold
these gains early next week and move higher on more convincing volume.
Stocks on our U.S. Focus List: Current Sentiment
Our USFL of 68 ideas gained 1.9% on average this week, outperforming the S&P 500 (+1.5%), but underper-
forming the Nasdaq (+2.4%).
Actionable Focus List ideas: Activision Blizzard ( ATVI ), Alphabet ( GOOGL ), At Home ( HOME ), Calavo Growers
( CVGW ), Diamondback Energy ( FANG ), Fleetcor Technologies ( FLT ), Home Depot ( HD ), Nextera Energy ( NEP ),
Paypal ( PYPL ), PRA Health Sciences ( PRAH ), SS&C Technologies ( SSNC ), Unitedhealth ( UNH ), Vertex Pharmaceu-
ticals ( VRTX )
By Sector
Technology ideas across the U.S. Focus List recovered this week. QTWO, TEAM, SSNC, CRM, MPWR, PSTG, and
GOOGL all found support at their respective 50-DMA, while RNG, NOW, VEEV, and ADSK all regained that
same level. ON, ANET, PAYC, RP, TYL, and NVDA are still trading below their respective 50-DMA. Payment pro-
cessors also did well this week, with six of our eight ideas moving higher off 50-DMA support. SQ, FLT, and
PYPL are leading the group, while GPN and PAGS are lagging. Health Care ideas also remain strong, holding
up well on a relative basis during the market decline, and now beginning to move back toward highs. IDXX,
UNH, ILMN, and PRAH all found support at the 50-DMA, while VRTX is building momentum after last week’s
gap up and setting up to test all-time highs. Conversely, Banks on the list remain weak. TCBI, WAL, and ZION
are still trading around their respective 200-DMA, while SIVB has come 10% off its high and below its 50-DMA.
Key points:
The stock is breaking out of an 11-week consolidation into all-time highs. We recommend buying shares here. Support is along the rising 50-DMA.
Technical ratings: RS line is approaching a new all-time high, RS Rating of 95, and A/D Rating of A-.
Fundamental ratings: Double-digit EPS and revenue growth expected over the next two years. SMR Rating of C. Composite Rating of 79.
Market Overview
The U.S. market is in an Uptrend Under Pressure. The S&P 500 and Nasdaq are both holding support above
their respective 50-DMA after a sharp pullback earlier in the week. We are now looking for this level of support
to hold for the next few sessions before we recommend increasing risk in the market. Distribution also remains
elevated at six days on the S&P 500 and seven on the Nasdaq. Next week, however, two distribution days expire
on each index which would take the count back down to a more comfortable level. Lastly, we are still monitoring
the action of leading ideas which have come sharply off recent highs. We will be looking for new ideas to
emerge, while prior leadership consolidates. Our recommendation is still to remain patient here with a focus on
high relative strength ideas bucking the general market pullback.
Stocks on our U.S. Focus List: Current Sentiment
Our USFL of 68 ideas (five net removals) lost 2.6% on average this week, underperforming the S&P 500 (-1.3%)
and the Nasdaq (-2.4%).
Actionable Focus List ideas: Activision Blizzard (
), Alphabet (
), At Home (
), Calavo Growers
(
), Continental Resources (
), Diamondback Energy (
), Fleetcor Technologies (
), Home Depot
(
), McCormick (
), Nextera Energy (
), Paypal (
), PRA Health Sciences (
), SS&C Technologies
(
), Supernus Pharmaceuticals (
), Unitedhealth (
), Vertex Pharmaceuticals (
)
By Sector
We did see early signs of rotation into Energy last week. This continued this week with
,
, WRD, and
all holding those gains despite the pullback in the market. Consumer Staple also came under accumulation
this week.
regained its 50-DMA and is now trading just 3% off all-time highs, while WTW and new addi-
tion
are both trading near new highs. Lastly, the two biotechs on the USFL,
and
, both broke
out and remain actionable at current levels. Conversely, Technology remains under pressure. The majority of
software ideas undercut short-term support levels and now need time to consolidate before presenting better en-
try points.
and RHT were both removed from our list due to severe technical deterioration, while PAYC,
ADSK, RNG, TYL, NOW, and RP all remain on the list, but are all trading below their respective 50-DMA.
Among software ideas,
does stand out positively with a relative strength line near new highs.
New Ideas or Deletions
We added McCormick (
) and removed Fedex (
), Splunk (
), Marvell Technology (
), MKS In-
struments (
), Morgan Stanley (
), and 58.com (
) from the U.S. Focus List this week.
Key points:
The stock is breaking out from a five-week flat base, turning actionable. We recommend adding to shares here. Support is at the rising 50-DMA (~$53.50).
Technical ratings: RS line is at a new high, RS Rating 92, A/D Rating B+.
Fundamental ratings: EPS Rank 99, SMR Rating A, Composite Rating 99.
Key points:
VRTX is actionable today after gapping up through near-term resistance at ~$160. The next level of resistance is all-time highs at $178.25. Underwhelming data from competitor Galapagos (GLPG) removed a major overhang on VRTX shares and will lead to upward revisions on long-term models. Consensus currently calls for 2021 adjusted EPS of $9.21 on revenue of $5.35B.
Technical ratings: RS line is now sharply rising, RS Rating of 44 will improve at the close, and A/D Rating has moved from E to D+ with today’s gap up.
Fundamental ratings: EPS Rank 74, SMR Rating A, Composite Rating 67.
